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upgrade from 1.7 to 1.9.2 navigation fail

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upgrade from 1.7 to 1.9.2 navigation fail

I upgraded my magento install via connect...check for package upgrades and commit. It went ok, but it broke the front end. It displays the logo and top links, but when it gets to the top menu navigation it goes blank due to fatal error. Apache says

 PHP Fatal error:  Call to a member function addCacheTag() on a non-object in /var/www/html/example/app/code/core/Mage/Catalog/Model/Observer.php on line 215

 So I went to line 215 of the observer file which is:

        $block->addCacheTag(Mage_Catalog_Model_Category::CACHE_TAG);

I think it's telling me the block doesn't exist, but I don't understand why not. I had a custom theme applied, but due to the error, I tried to just use the default magento themes and it still didn't work. Any tips?